Mechanical Breakdown Administrators, Inc.

www.mbadirect.com

Background

Our founding members have been actively involved in the insurance business since 1960 and the warranty business since 1974. Our company markets Mechanical Breakdown protection for the Old Republic Insurance Company (NYSE: ORI), which has been in business since 1923. MBA also adjudicates and pays all claims associated with these policies. We are also a marketer and administrator for

American Bankers Insurance Company of Miami, Florida
Kemper Insurance Company of Long Grove, Illinois
Heritage Warranty Mutual Insurance Company of Lincoln, Nebraska
Standard Guarantee Insurance Company of St. Petersburg, Florida
American Security Insurance Company of Atlanta, Georgia
Allstate Insurance Company of Chicago, Illinois
Fireman's Fund Insurance Company of Chicago, Illinois

Plans to expand the market for MBA warranty products include current negotiations to offer MBA warranties as promotional incentives to the hundreds of thousands of monthly oil change and lube customers of national auto service centers and chains. Other warranty cross-promotional opportunities are currently under discussion.

The National Motorcycle Dealers Association (NMDA), MBA's subsidiary, was created to provide to the large existing network of motorcycle dealerships, manufacturers and associated industry businesses in the U.S. and Canada an integrated platform of programs to deliver insurance, finance and business solutions backed by nationally recognized vendors.

MBA's experience in the insurance field plus the company's existing operations infrastructure have provided the network and tools to build the NMDA rapidly from its formation in early fall 2004. Partners and program members of the NMDA already include GEICO, Aon, Aegon, Zurich, the Van Tuyl Group and many additional service providers.

Current programs offered include consumer financing, motorcycle warranties, liability and GAP insurance, F&I training, the NMDA roadside assistance motor club , GPS motorcycle tracking systems, credit card processing, human resources and payroll services.

Pending programs include dealer wholesale floor planning and financing, garage/open lot liability insurance, group health and life insurance, wholesale parts volume discounts and internet help wanted employment listings for the motorcycle industry. The NMDA's website is being expanded to service association members with plans for a dual internet consumer gateway to market NMDA programs and partners to the public.

Two primary NMDA programs are motorcycle leasing and rentals. The NMDA has partnered with D&M Leasing, a subsidiary of car dealer giant the Van Tuyl Group, to market motorcycle leasing. With a higher resale value after lease expiration, motorcycles represent a more lucrative market opportunity than the thin margins currently found in auto leasing, and until now has not had the backing of a major company on a national scale. The NMDA believes the opportunities to grow their leasing program are considerable and is looking to leasing to be the primary revenue driver in the first half of 2005.

Motorcycle rentals is a core program for MBA and the NMDA. The growth and revenue opportunities for motorcycle rentals are considerable and largely untapped. MBA is half owner of Blue Sky Motorcycle Rentals, a rapidly expanding motorcycle rental franchise chain adding new franchise rental locations every month. The NMDA is also developing a parallel rental program named NMDA Rentals to service existing dealers wishing to convert existing bikes or lease fleet bikes for a rental program.

Through NMDA Rentals, the NMDA has developed a proprietary motorcycle rental software program which is soon to be updated to a fully modernized web-based reservation system designed to serve the Blue Sky and NMDA Rentals programs and rent all forms of sports and recreational vehicles online. Most insurance carriers have been unwilling to offer the rental insurance coverage required for this important segment of the motorcycle industry. The NMDA hs instituted the compliance controls required to motorcycle dealers a viable and insurable rental program. MBA and the NMDA aim to become the market leader in motorcycle rentals.

The NMDA is actively developing comprehensive inventory management opportunities for motorcycle dealers via partnership with a growing motorcycle dealer internet wholesale marketplace and vehicle auctioneers. The NMDA is establishing itself as the primary coordinator of and inventory supplier for motorcycle auction sales with major vehicle auction houses. Motorcycle auction sales are growing and the NMDA is already delivering to auction dealer surplus bikes while successfully building new sales channels for American motorcycle manufacturers.

The NMDA business model is built on growing diverse and recurring revenue streams derived from fees, partnership program commissions and primary vendor revenues through businesses such as motorcycle rentals. The association is on target to reach the first 1,000 dealership association membership mark in the first half of 2005 which will further maximize the NMDA's ability to leverage wholesale pricing advantages for association members. The projection is to achieve 2,000-3,000 members by the end of 2005 with further membership growth in 2006.

The NMDA has received commitments from two motorcycle manufacturers to actively participate in the NMDA. These two manufacturers have pledged to actively promote NMDA membership to their collective 150+ dealer network. Discussions include enlisting these dealership networks in the Blue Sky and NMDA rental programs and the promotion of the NMDA's leasing program. Ongoing discussions with additional motorcycle manufacturers include a potential new program with the NMDA underwriting a risk pool for product liability insurance for a coalition of motorcycle manufacturers.

With approximately 20,000 dealerships in North America and no prior motorcycle association organized to effectively serve this constituency with a full slate of commercial services, the NMDA has positioned itself for significant additional growth with baby boomers purchasing motorcycles in record numbers and gasoline prices ensuring the future economic viability of motorcycle usage. The motorcycle industry and its dealership network had not previously been serviced to the same extent as the matured automobile industry and provides superior sector growth opportunities for the NMDA.

MBA is close to break even with the capacity for rapid topline growth and the reasonable expectation of achieving profitability and growth in the near future. The company is free of any equity financing relationships and expects to fuel its expansion primarily through anticipated 2005 cash flow. The outstanding share count of MBAH.OB has remained relatively static since early Fall 2004. The company intends to only use shares for expansion capitalization judiciously and this minimize the dilution of its current share count of approximately 125M. There is now the reasonable expectation that MBA Holdings and its NMDA subsidiary will produce significant membership and revenue growth in 2005.

Management

Gaylen M. Brotherson, CEO and Chairman of the Board of Directors, is responsible for the development of the coverage marketing, advertising, sales, and distribution. His experience includes working with Jay Barmish Finance and Insurance Group Companies and Byron Reed Company (Commercial Real Estate). Mr. Brotherson previously owned Sunset Speedway Group, Empire Real Estate Company and Gateway Real Estate Company, and former President and Partner in the International Motor Contest Association (IMCA) for 20 years. He is also President of the Tapestry Group, a 501C3 private real estate foundation, President of 1st Defense Industries, Inc., President of Blue Sky Motorcycle Rentals, Inc. and owner of Cactus Family Investments, LLC. He has experience with many insurance companies in the sales of life, health, accident, liability, and collision insurance, as well as over 30 years experience in the sale of Vehicle Service Contracts and Mechanical Breakdown Insurance.

Judy K. Brotherson, President of Mechanical Breakdown Administrators, Inc. since 1989, is responsible for policy procedures, overall computer management, and data entry. Judy holds multiple insurance licenses in several states.

Key MBA Personnel include

Raymond Bartunek, Claims Department Manager
Edwin Rodriguez, National Sales Manager/Policy Department Manager
Dennis O'Connor, Chief Financial Officer
Kathy Just, Human Resources and Training Coordinator